U.S. Hiring Slows as Unemployment Rate Edges Up to 4.2 Percent

October 2, 2026 – Employment increased by 29,000 in September as the U.S. unemployment rate edged up to at 4.2 percent, according to the most recent U.S. Bureau of Labor Statistics report. The number of unemployed people, at 7.1 million, also increased in September.

Among the major worker groups, the unemployment rate for people who are Black (7.0 percent) increased in September. The jobless rates for adult men (3.9 percent), adult women (3.6 percent),  teenagers (14.5 percent), and people who are White (3.6 percent), Asian (2.9 percent), or Hispanic (4.7 percent) showed little change over the month.

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 1.9 million in September. The long-term unemployed accounted for 27.1 percent of all unemployed people. Both the labor force participation rate, at 61.8 percent, and the employment-population ratio, at 59.2 percent, changed little in September. These measures showed little net change since January.

The number of people employed part time for economic reasons changed little at 4.5 million in September. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs.

In September, the number of people not in the labor force who currently want a job changed little at 5.8 million. These individuals were not counted as unemployed because they were not actively looking for work during the four weeks preceding the survey or were unavailable to take a job. Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force decreased by 236,000 to 1.5 million in September. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, changed little over the month at 414,000.

Where Job Growth Occurred

• Healthcare employment continued its upward trend in September (+17,000), but at a slower pace than the average monthly gain over the prior 12 months (+33,000). In September, employment continued to trend up in ambulatory health care services (+13,000) and in hospitals (+12,000), while nursing and residential care facilities lost jobs (-9,000).
• Employment in construction changed little in September (+11,000). The industry had added an average of 10,000 jobs per month over the prior 12 months. In September, employment in nonresidential specialty trade contractors continued to trend up (+12,000).
• Manufacturing employment was little changed in September (+9,000) but is up by 72,000 since a recent low in December 2025. Over the month, employment increased in plastics and rubber products manufacturing (+5,000) and in machinery manufacturing (+5,000).
• In September, financial activities employment was little changed (-7,000). Employment in financial activities is down by 129,000 since a recent peak in May 2025, with most of the job loss in insurance carriers and related activities (-90,000).
• Employment also showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; wholesale trade; retail trade; transportation and warehousing; information; professional and business services; social assistance; leisure and hospitality; other services; and government.

“We are seeing a modest improvement,” Daniel Zhao, chief economist at Glassdoor, said. “Whether that’s enough to really make workers feel good about the job market is a different question. A modest improvement is not really the same as opening up opportunities and really making people feel like they can advance their careers.”

“The softer employment gain and tick up in the unemployment rate in September is not enough to spoil the image of a labor market which is broadly performing well, though it may help to trim investors’ expectations for how far the Fed will eventually tighten back towards our view for two more rate hikes,” said Bradley Saunders, North America economist at Capital Economics.

“We’re probably going to see more volatility in the labor market this year,” said Nicole Bachaud, labor economist at ZipRecruiter. “There’s just a lot of different factors impacting both worker movements and employer hiring expectations, and those are changing really, really quickly.”

Related: As Executive Search Accelerates, Judgment Becomes the Differentiator

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor – Hunt Scanlon Media